Perth-based petroleum producer and explorer Triangle Energy finished the past quarter with $5.24 million in the bank as it homes in on the onshore North Perth Basin, where it will drill for oil this year.
The company is currently producing and selling crude from its Cliff Head field off the Western Australian coastal town of Dongara, with that operation netting it $15 million as part of a sales deal with Pilot Energy. Overseas, Triangle is also on the hydrocarbon hunt in the United Kingdom and the Philippines to keep the flow going.
Triangle’s flagship acreage is its landholding about 50km east of Dongara, where it holds a 50 per cent operating interest in both the L7 and EP437 exploration permits in the North Perth Basin – with two wells planned for this year.
Triangle says the Bookara three-dimensional seismic dataset over the acreage has revealed it may be sitting on 36 million barrels (MMbbls) of oil and 535 billion cubic feet (Bcf) of gas as a best-estimate prospective (P50) resource. That volume sits within 11 new prospects mapped in the company’s L7 block, with an additional 5MMbbls P50 resource in a separate prospect.
The company says it is planning the first well for L7 to be drilled at the Booth prospect, which has a P50 resource of 279Bcf of gas within the Kingia-High Cliff reservoirs and the potential for another 19Bcf of gas or 8.5MMbbls of oil in the overlying Dongara sandstone. The Booth-1 well will also pass through the Cattamarra reservoirs that contain a P50 resource estimate of 2.7MMbbls of oil, with another 3.2MMbbls tied up in the Booth Footwall reservoir section adding to the prospectivity.
Triangle says oil is the most likely hydrocarbon in the Dongara and Cattamarra sandstones, as evidenced by recent drilling at the North Erregulla Deep, Lockyer Deep and Mt Horner oil fields nearby in comparable rock intervals.
Management says following drilling at Booth, it plans to plunge into its Becos oil prospect – within its EP437 permit – which the company says can be drilled by a smaller rig than that required by Booth-1. The Becos prospect has a low-side estimate of 1MMbbls of oil, a best-estimate of 5MMbbls and high-side estimate of 21MMbbls hosted within the Bookara sandstone.
The landholding is about 80km from the port of Geraldton, giving Triangle export potential in addition to the ability to service the metropolitan area to the south of the State. The company has farmed out a 50 per cent interest in both the L7 and EP 437 permits to Talon Energy, which is now part-owned by Strike Energy and New Zealand Oil and Gas with 25 per cent each, and its net cost of the first three wells in the basin will be about $4 million.
The company says long lead items for the wells are on the ship to WA and environmental approvals have been submitted.
At the Cliff Head oil field, 11km off the WA coast just south of Dongara, 46,555 barrels of oil was pumped out during the last quarter at an average production rate of 506 barrels of oil per day (BOPD), down from typical rates due to the shut-in of two wells for annual integrity testing. The company says the two wells are expected to be back on-line mid-next month and that rate should jump to about 600BOPD.
Cliff Head is producing from a best estimate gross reserve (2P) of 0.53 million stock tank barrels of oil, which was estimated on June 30 last year. The oil is shipped to a refinery in Asia where it is sold at a spot price and the company says it is expecting to make a seventh offtake shipment in March this year, ahead of receiving payment the following month.
It collected nearly $4.1 million from the sixth shipment during the past quarter.
At present, the Cliff Head operation is run as a joint venture between Triangle with 78.75 per cent and Pilot with a 21.25 per cent interest. In July last year, Triangle agreed to sell its interest in Cliff Head to Pilot for $15 million.
Pilot’s long- term plan for the field is to transition it into a carbon capture and storage (CCS) project and Triangle will maintain exposure to it through royalties. Triangle says is has been working with Pilot to define the process necessary to convert the Cliff Head facilities to be CCS-compatible once economic oil production stops.
The next expected milestone for the project is the declaration of the Cliff Head subsurface reservoir as an eligible greenhouse gas storage formation, which Triangle says is expected early this year ahead of the award of a greenhouse gas injection license a year later. Triangle will receive $3 million upon the declaration of reservoir eligibility for greenhouse gas storage and a further $4.5 million once the injection license is approved. The CCS royalties will make up the remaining $7.5 million.
Overseas, Triangle says it is assessing the prospectivity of five blocks in the UK west of Shetlands as part of a 50:50 joint venture with British company Athena Exploration. The blocks contain the Cragganmore gas field that is defined by three wells and has a best estimate gross contingent resource (2C) of 527Bcf of gas.
Triangle says the joint venture (JV) believes there is exploration potential at other prospects already identified within the blocks and plans to reprocess seismic data as a first-step towards maturing its subsurface models.
Still overseas, but this time in the Philippines, the company revealed in October last year that it was awarded qualification to enter into a petroleum service contract for an onshore permit in the prospective Cagayan Basin. The area is adjacent to the first gas discovery in the country at the San Antonio field that has been producing for 14 years.
While Triangle is charging ahead with its North Perth Basin drill planning, it seems to have most bases covered with exploration potential in several overseas locations, in addition to a producing oil asset on home turf and ongoing exposure to CCS.
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